Buy to let mortgage calculator
Our buy to let mortgage calculator compares the interest rates from over 80 lenders.
It provides you with an indication of the interest rate and monthly repayments, as well as listing product fees and benefits.
Our team of buy to let specialists are on hand to help via live chat or phone during office hours, should you have any questions. You can submit an enquiry out of hours and we will get back to you.
Get started now - simply fill in the details below to begin
How to use the buy to let mortgage calculator.
The buy to let mortgage calculator gives you an indication of monthly costs and indicative interest rates. The actual interest rate you receive may vary, depending on your circumstances
First, select whether you are remortgaging, purchasing or are a first time landlord. We have specific rates for each category. If you are remortgaging, input the property value and the outstanding on existing mortgage. If you are purchasing, input the property value and your deposit amount.
Add the mortgage term (the length of time you want to borrow the money over, which will affect the monthly payment) you are looking for, as well as the repayment basis.
Make sure to tick the specialty options if they apply. “HMO” if you are looking for rates for a House of Multiple Occupation, “Limited Company/SPV” if you are borrowing through a company, “Holiday Let” if your property is to be used for short term lets aka AirBnB or traditional holiday lets.
Once you have clicked search you will be presented with a table that will easily allow you to compare the products. To see more information on specific products, click the arrrow next to the initial rate. This will tell you about any early repayment charges, additional benefits and the maximum age of applicants at the end of the mortgage term.
Once you have an idea of the rates available, you can click the apply button to send the details of your search through to one of our mortgage advisors. They will then call you back to discuss your needs and find the product that matches up with them, for you.
Rates on our buy to let mortgage calculator are illustrative. The products are designed to give you an idea of the mortgage amount you can borrow and the rates available currently. To find out if you are eligible for the products shown, please get in touch with one of our advisors.
Buy to let mortgage rates
Buy to let mortgage rates vary greatly. On the same loan amount, a lower interest rate will mean monthly payments to the lender are lower. This means you have the possibility to earn more profit, from the rental income, as the landlord.
The interest rate you can get will depend on a variety of factors, including the amount you wish to borrow and your circumstances.
To get an indication of the current buy to let rates we have available, click the button below to compare the best deals from our panel of lenders.
Different lenders have different criteria for their borrowers, so the deals available to you will vary based on your needs and circumstances. This will include things like, the type of property you are using as security, the location of the property, whether you are investing through a company or not, your credit history, the amount of rent you are receiving and more.
You can use our buy to let mortgage calculator to view a wide range of current deals, and our team of specialists are always on hand if you have any questions or want to apply.
Do you need a bigger deposit for a buy to let mortgage?
Not always, but remember that the more deposit you have, the less you will need to borrow. Mortgage rates are typically lower the bigger the deposit you have. This can result in cheaper monthly mortgage payments.
Each lender will have different requirements regarding a deposit. If you have a small deposit, lower LTV options may be available. Just talk to one of our advisors to discuss your requirements and they will do their very best to find a suitable option for you.
The buy to let calculator will display the loan-to-value option for each product, and how much deposit you will need to provide. Learn more about LTV and deposits by visiting our deposits and LTV page.
How much can I borrow on a buy to let mortgage?
How much you can borrow depends on a number of factors. Most lenders will look at the rental yield of a property and how much deposit you are willing to contribute.
The majority of lenders will “stress test” the amount of rent you are able to make from the property, and use this to calculate how much you can borrow. Other lenders will also take your personal income into consideration when working out how much you can borrow. This also applies to first time buyers.
There are also lenders who can provide a higher loan amount, where your personal disposable income is taken into consideration on the affordability calculation.
What is the difference between fixed, tracker and variable mortgages?
A fixed interest rate will remain the same throughout the life of the mortgage. Variable and tracker rates can go either up or down, which can alter your monthly repayments.
Fixed rate products mean that the initial rate seen on the buy to let mortgage calculator is set for a period of time, usually 2, 5 or 10 years. The initial period is given in months, as lenders sometimes offer broader, but pre-defined, timeframes. After that initial period, the rate will change, as illustrated by the second percentage on the calculator. The benefit of selecting a fixed rate, is that you can budget accordingly, as the rate will not change. The downside is that if rates get lower, you are locked into yours for the initial period.
Variable rates will, as the name suggests, vary throughout your mortgage term. They change depending on the rate they are based on. This is often the Bank of England base rate, but they are ultimately set by the lender. The benefit of variable rates are that if the rate they are calculated from changes favourably, so can your mortgage rate. However, the downside is that there is no guarantee that a change to the Bank of England base rate will be favourable, and could mean your mortgage payments become more expensive.
There are three types of variable rate:
- Tracker rates track another rate, such as the Bank of England Base Rate, plus a certain margin added on top.
- Lender managed rates are set by the lender, they are often guided by the Bank of England base rate. Typically they don’t often change, but the lender does reserve the right to change the rate.
- Discounted rates are those based on a lenders standard variable rate, with a discount applied, which is expressed as a percentage. If the rate which influences the standard variable rate of the lender changes, then your mortgage rate could also change.
On our calculator, you will find different types of products, including fixed, tracker and variable. If you are not sure which would be the best to suit your situation, get in touch with a specialist mortgage advisor today to discuss your options. You can either submit an enquiry using our online form, live chat directly with a mortgage advisor or call the number above to get through to one of the team.
What is the difference between an interest only and capital repayment mortgage?
With a capital repayment mortgage, you will pay back an amount of the loan (the capital) and the interest each month. With an interest only mortgage you only pay the interest on the mortgage each month.
With a capital repayment mortgage, the amount you owe will reduce every month, as long as you keep up with the repayments. At the end of the mortgage term you will own the property outright. As you are paying back both, the costs of a repayment mortgage are higher than a like for like interest only mortgage.
With an interest only mortgage, at the end of the term, you will need to repay the capital that you have borrowed. This means your monthly mortgage payments would be smaller than a like for like capital repayment mortgage. Some landlords use the rental income to cover the monthly mortgage payment, and plan to sell the property at the end of the mortgage term, using the income from the sale to cover the capital owed.
What is rental yield and how is it calculated?
Rental yield is the amount of money that a buy to let can produce after costs. This involves taking the rental income, minus the costs that occur when owning a buy to let, divided by the property’s purchase price.
It is the financial return that you would be expected to make on the buy to let, usually expressed as a percentage. Rental yield is then used to calculate if you would make a positive return on your investment on the buy to let property.
If the figures don’t match up, or the rental yield returns a low figure, you may not have adequate cash to cover running costs, as well as unforeseen costs that could happen.
What is interest coverage ratio?
Interest coverage ratio is an assessment from mortgage lenders to make sure that the rental income from the property covers the mortgage payments, as well as any additional costs.
The ICR, as it is sometimes known, is expressed as a percentage. The calculation to work it out varies from lender to lender, as they have different risk calculations when it comes to void periods.
What affects the rate I can secure on a buy to let mortgage?
Each lender will have its own criteria you will need to meet, to have access to their rates. These vary from lender to lender and will mean that while a low rate is on the market, you may not be eligible for it.
Factors that can affect your lending choices:
- Loan to value: How much money you can put into the deposit, or amount of equity if remortgaging. The more money you can invest in the property, generally the more rates you will have access to.
- Applicant type: There are specific rates for individuals, which can’t be used by a limited company. Rates for limited companies tend to be higher.
- Property type: There are specific rates for some properties, such as a House of Multiple Occupation (HMO), or a Multi-Unit Block (MUB). Historically these rates tend to be higher than those for what is considered to be a ‘standard’ buy to let property or flat.
- Property construction: if a property is of non-standard construction (e.g. is not brick walls with pitched, tiled roof) the choice of lender may be narrower. This may lead to rates being higher.
- Rental income: When it is compared to the loan size, if the rental income is low, there is a greater risk in the eyes of lenders, which can influence the rate. Or, if the income is not enough to pass affordability testing, this may result in a higher interest rate to account for the risk.
- Credit history: Being a specialist broker we have access to lenders who are comfortable with a blip or two on your credit profile. However, not all lenders are happy with this, so it may limit the number of rates you have access to.
- Personal income: Some lenders will have criteria about the minimum personal income that they require. We have access to lenders who have no minimum income requirements as well, but you may have a narrower selection of rates to choose from.
- Applicant age: Some lenders will place an age restriction on the applicant they are lending to. This can be both a lower and an upper age limit. In general, the minimum age is 18 years old, but upper age limits are more flexible, and we have lenders with no upper age limit.
- Properties owned: How many properties a landlord owns can restrict the products they are eligible for. Some lenders will have specific portfolio products for landlords with 4 or more properties or 10 or more properties.
- Exposure: Lenders will want to make sure they are not over-exposed in a certain building, location, or with a specific client. If a lender already has a number of mortgages on a street, they may not lend to you, if your property is also on that street. Or, if you own a number of properties in the same building, and buy another, the lender you have in place may not be prepared to lend again. This will mean that, in some cases, you may not be eligible for as many products.
What are the types of buy to let mortgage rates?
There is also the option to select a fixed or variable buy to let mortgage rate.
Fixed mortgage rates
Fixed mortgage rates are set for their initial period. This means that for the 2,3,5 or 10 years specified on the rate, the rate will remain the same. After the initial rate period, the rate will change to a reversion rate, usually the lender’s standard variable rate (often referred to as the SVR). The reversion rate can be higher than the initial rate, which is why it is sensible to review the market to see if a better rate can be secured elsewhere. As a broker, we are here to help with this.
Variable mortgage rates
Variable rates mean that the interest rate may change. Variable mortgages are either tracker mortgages or discount mortgage rates. Tracker mortgages typically track the Bank of England base rate and there will be a percentage increase on top of this. Variable mortgages are set by the lender and they can change at any time.
Both variable and fixed mortgages have benefits. Fixed mortgage rates are usually higher, but having the rate set for some time, allowing you to budget accordingly. Monitoring mortgage rates is a useful practice so that you can assess whether rates are likely to go up, or down. If rates are likely to go up and are currently low, you may choose to fix your rate to mitigate the risk of your mortgage costs going up. Variable mortgages come with an amount of risk, as rates could increase. Alternatively, you could be set to save if the rate it is tracking drops.
Are buy to let mortgage rates higher?
It varies from lender to lender, but buy to let mortgage rates are sometimes higher than residential rates. This is because there is more risk when lending to a landlord. They also have different criteria from residential rates.
The risk is due to the chances that tenants may not pay or that the property may be empty for a period of time (a void period). You may also need a larger deposit than many residential mortgages.
Is a residential mortgage cheaper than a buy-to-let?
Not always. Both residential and buy to let can be repaid on an interest only or capital repayment basis. However, when you are paying off a residential mortgage, the objective is usually to own the property at the end of the term. Therefore, if you are repaying a residential mortgage, you are more likely to do so, on capital repayment basis. Therefore, on a like for like basis an interest only mortgage would be cheaper.
A buy to let mortgage is designed for a specific purpose, renting out the property. If you want to buy a property to rent out, you won’t be able to use a residential mortgage, even if it is cheaper. To discuss getting access to the best rates from our panel of lenders, please get in touch with one of our team and they will be able to answer all your questions while finding you a great rate for your property.
What is the difference between interest only and capital repayment?
On a capital repayment mortgage, you pay back what you have borrowed monthly, as well as the interest on top. An interest only mortgage does not require you to pay back the money you have borrowed monthly, only the interest.
At the end of a capital repayment mortgage, if you have paid each monthly instalment, you will own the property outright. You can choose to continue to rent out the property if you wish, and the profit would not have to go towards paying the property’s mortgage.
With an interest only mortgage, you will need to find a way to pay back the capital you have borrowed at the end of the mortgage term. You will need a plan in place to be able to pay the lender this money. Some landlords choose to remortgage the property, others will sell it and hope for property price increases to allow them some profit after the fact.
How to find the best buy to let mortgage rate?
To see our lowest mortgage rates, use the buy to let calculator at the top of the page. Bear in mind, the lowest interest rate is not always the best rate. Some low rates come with strict criteria or high product fees.
This is where a buy to let broker such as Commercial Trust comes in. Our dedicated buy to let mortgage advisors are trained to help you decide what you would like to prioritise in your search, and find the product to match.
Whether the lowest possible interest rate or highest LTV is your aim, or there are other influencing factors, we can assess your situation and find the product that ticks your boxes.
Do I need an income for a buy to let mortgage?
Yes. All lenders will require you to have some sort of income.
Whilst employed or self employed income is common for many people, some lenders accept income just from rent, or from a pension. Some lenders will require your personal income to be above a threshold they have set within their qualifying criteria. We work with specific lenders who do not require a minimum income for access to their rates.